CPA profession’s push for full mobility continues

By James Cox

Twenty years ago, in 1998, the CPA profession launched a campaign to adopt a seamless cross-border system for CPA licenses. At that time, only two states – Ohio and Virginia – allowed CPAs to practice across state lines without obtaining a reciprocal license. Today, the campaign is a success with 49 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam adopting individual CPA mobility provisions. The CPA profession created an innovative and effective model for cross-state systems.

Hawaii and the Commonwealth of the Northern Mariana Islands, the two remaining U.S. jurisdictions, continue to discuss changes to their accountancy statutes to allow for seamless cross-border practice.

Individual CPA mobility began when the AICPA, in conjunction with the National Association of State Boards of Accountancy (NASBA) added the concept of substantial equivalency to the Uniform Accountancy Act (UAA) in 1997.

Under this concept, a CPA licensed in good standing from a state with substantially equivalent licensing requirements would be qualified to practice in another state that is not their principal place of business. This concept also included a requirement that the out-of-state CPA provide the practice privilege state with notification of practice in the state.

For substantial equivalency to effectively impact cross-border practice and protect the public, each state needed to enact and implement the same provision. Unfortunately, states adopted varying notification requirements that did little to protect the public and created a patchwork system of individual requirements that was difficult to navigate.

The AICPA and NASBA revisited the issues that emerged from the adoption of substantial equivalency and agreed upon revisions to the UAA. Adopted in 2007, the revisions better facilitated individual CPA mobility by giving state boards of accountancy automatic jurisdiction over out-of-state CPAs.

With the campaign for individual CPA mobility drawing to a close, the profession is again leading the way through its promotion of a similar system of license reciprocity for CPA firms. To date, twenty-two states have adopted CPA firm mobility. Five states – Kentucky, Massachusetts, Michigan, New Hampshire and New Jersey – have legislation pending in their legislatures. Bills in both Kentucky and Michigan passed their respective legislatures and are awaiting gubernatorial approval.

James Cox is the Association of International Certified Professional Accountants’ Senior Manager for State Legislation. James.Cox@aicpa-cima.com